Auto Bailout Stalls in Senate

The House Republican leader, Rep. John A. Boehner, R-Ohio, reaches out the extended hand of Rep. John Salazar, D-Colo., left, unseen, after the auto industry bailout vote passed in the face of strong GOP opposition, at the Capitol in Washington, Wednesday, Dec. 10, 2008. (AP Photo/J. Scott Applewhite)

Washington (AP) - With time growing short, the $14 billion auto industry bailout bill stalled in the Senate on Thursday as Republicans demanded upfront concessions from the United Auto Workers as the price for their support. UAW and auto industry officials were in talks with key Republicans and Democrats at the Capitol, although it wasn't clear what, if any, givebacks the union was willing to discuss.

The developments unfolded after Senate Republican leader Mitch McConnell of Kentucky joined other GOP lawmakers in announcing his opposition to a White House-backed bill that was approved by the House on Wednesday. He called for an alternative that would reduce the wages and benefits of the Big Three automakers to bring them in line with those paid by Japanese carmakers Nissan, Toyota and Honda.

Sen. Bob Corker, R-Tenn., the sponsor of that proposal, was in closed-door meetings with UAW officials and Democratic Sen. Chris Dodd of Connecticut, the Banking Committee chairman, to see if it could be modified to win the support of Democrats, who count labor unions among their strongest political allies.

Auto industry officials also were in on the high-stakes talks, which unfolded against a backdrop of stunning job losses and continuing economic turmoil. New claims for unemployment benefits rose by more than a half-million for the week ending last Saturday.

A growing number of Republicans and Democrats were turning against the House-passed bill - itself the product of hard-fought negotiations between the Bush White House and congressional Democrats - despite urgent entreaties from both President George W. Bush and President-elect Barack Obama for quick action to spare the economy the added pain of a potential automaker collapse.

The rescue plan would speed emergency short-term loans to cash-starved General Motors Corp. and Chrysler LLC.

Ford Motor Co. would be eligible as well but has said it has enough cash to survive without federal help.

It would create a Bush-appointed overseer - a kind of "car czar" - to dole out the money but also with authority to yank it back if the carmakers didn't cut quick deals with their unions and creditors, among others, to restructure and submit a plan outlining the steps by next spring.

McConnell said that measure "isn't nearly tough enough."

Pushing to convert skeptics in both parties, Democrats agreed to drop at least one unrelated provision that threatened to sink the measure, a congressional official said. They were eliminating a pay raise for federal judges after Democratic Sen. Claire McCaskill of Missouri, who represents an automobile manufacturing state, announced she would oppose the carmaker aid unless that provision was removed.

Supporters had an uphill battle pressing the rescue package on a bailout-fatigued Congress - particularly a measure designed to span the administrations of a lame-duck president and his successor. Forced together by growing economic turmoil, the incoming and outgoing presidents were united in pressing hard for swift approval.

In Chicago, Obama told reporters that an industry shutdown would have a "devastating ripple effect" on the already ragged economy.

Earlier, just after the Labor Department reported new applications for jobless benefits were at their highest level in 26 years, White House Press Secretary Dana Perino said the country couldn't afford an auto industry meltdown.

On Capitol Hill, patience was wearing thin as the clock ticked down on the current Congress.

Sen. Harry Reid, D-Nev., the majority leader, called for swift separate votes Thursday on compromise legislation backed by Democrats and the White House as well as the GOP proposal. If not, he promised a test vote Friday morning to force a final up-or-down decision within days.

"We have danced this tune long enough," Reid declared.

But many Republicans remained staunchly opposed to the rescue, and some Democrats were ill or absent from the emergency, postelection congressional session. Supporters of the bailout acknowledged that in this scenario, getting the needed 60 votes to pass it would be very difficult.

Republicans were directly challenging Bush, arguing that any support for the domestic auto industry should carry significant, specific concessions from autoworkers and creditors. They are also bitterly opposed to tougher environmental rules carmakers would have to meet as part of the House-passed version of the rescue package - something that also faces some Democratic opposition.

A Senate version of the bill omits the environmental provision.

The House approved its plan late Wednesday on a vote of 237-170. Supporters cited dire warnings from GM and Chrysler executives, who have said they could run out of cash within weeks.

A pair of polls released Thursday indicated that the public is dubious about the rescue plan.

Just 39 percent said it would be right to spend billions in loans to keep GM, Ford and Chrysler in business, according to a poll by the nonpartisan Pew Research Center. Just 45 percent of Democrats and 31 percent of Republicans supported the idea.

In a separate Marist College poll, 48 percent said they oppose federal loans for the struggling automakers while 41 percent approved.

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Associated Press Writers David Espo and Alan Fram contributed to this report.

With time growing short, the $14 billion auto industry bailout bill stalled in the Senate on Thursday as Republicans demanded upfront concessions from the United Auto Workers as the price for their support. UAW and auto industry officials were in talks wi